Investigation: Apple vs Nokia vs Google vs HTC vs RIM

This article was taken from the June issue of Wired magazine. Be the first to read Wired's articles in print before they're posted online, and get your hands on loads of additional content by subscribing online

Some wars are fought with artillery and helicopters; others with press releases and lawsuits. In March, Apple fired a missile by releasing a statement declaring that it was suing smartphone manufacturer HTC for infringing 20 of its iPhone patents.

"We can sit by and watch competitors steal our patented inventions, or we can do something about it," said Apple CEO Steve Jobs. "We've decided to do something about it. We think competition is healthy, but competitors should create their own original technology, not steal ours."

In its complaint to US regulator the International Trade Commission (ITC), Apple claimed -- and continues to claim -- that Taiwan-based HTC is infringing patents related to the iPhone's user interface, hardware and software design. Apple named 12 phones that use this technology: of those, five also use Google's Android operating system, and seven also use Microsoft Windows mobile software.

Apple's reward, if this claim proves successful: the importation and selling of these devices would be prevented in the US. "We are not a party to this lawsuit," a Google spokesperson tells Wired. "However, we stand behind our Android operating system and the partners who have helped us to develop it." Apple told Wired that it has a policy of not commenting on ongoing litigation. Although it is investigating Apple's claims, the ITC has yet to express an opinion.

HTC, the world's fifth-largest manufacturer of smartphones, says it first heard of Apple's intentions when it saw the press release. "It's part of business," HTC's chief executive, Peter Chou, responds. "We need to face it and everyone can talk it through." HTC, however, is not the only adversary in the sights of Apple's lawyers: the company is also suing Nokia, claiming infringement of 13 of its patents. In this case, however, it was Nokia that fired the first salvo in October 2009, when it claimed that Apple had infringed more than ten of its patents related to Wi-Fi, GSM and 3G wireless technology -- infringements that cover all models of the iPhone.

Nokia had already licensed the same technologies to several dozen other companies and had been in protracted, unsuccessful, negotiations with Apple. "Apple is attempting to get a free ride on the back of Nokia's innovation," says Ilkka Rahnasto, vice-president of legal and intellectual property at Nokia. "The basic principle in the mobile industry is that those companies that contribute in technology development to establish standards create intellectual property, which others then need to compensate for. Apple is also expected to follow this principle." Rahnasto adds that, during the last two decades, Nokia has invested approximately €40bn (£36.2bn) on research and development.

Some analysts believe that, if the courts find in Nokia's favour, it could cost Apple around $1billion. Others estimate that it would be less: around $6 to $12 per iPhone on total global sales of around 50 million. In December Apple countersued, claiming that the Finnish company had infringed 13 iPhone-related patents; the same month, Nokia filed another complaint, and escalated the dispute by claiming Apple was infringing seven of its patents in virtually every technology it produces.

In January, Nokia filed a third complaint, requesting that Apple products -- including the iPhone -- be banned from the US. Two months later a judge in Delaware, where some of the suits were filed, put the claims on hold in the hope that the ITC can resolve the dispute. The fight between Apple and Nokia is emblematic of a broader malaise sweeping the tech and communications industries as companies use their patents not for innovation, but to hobble their rivals. Some of the world's most forward looking businesses are now litigators as well as innovators.

What has for years been a who will-blink-first Mexican stand-off between the tech giants has turned into an all-out gunfight, albeit one conducted by the toughest corporate lawyers money can buy. "Everybody started suing each other a lot more -- not only in telecoms, but in software and a number of other fields -- starting in the mid- to late-90s," says Jim Bessen, a law lecturer at Boston University. "The number of lawsuits filed in the US has tripled since the early-90s." Other than the spat between Apple and Nokia, over the past couple of years several other high-profile companies have become lawyered up.

In January last year Apple and Palm engaged in a war of words relating to Apple's iPhone-related patents -- specifically US Patent Office Patent No 7479949, which arguably grants Apple the intellectual ownership of multitouch functionality in mobile devices -- shortly before the launch of the Palm Pre phone and its multitouch interface.

In December 2009, a judge ruled in favour of Kodak when it sued Samsung, alleging that some of its patents were infringed by Samsung's mobile phones. In January this year, Kodak filed lawsuits against Apple and Research in Motion (RIM) alleging that the iPhone and BlackBerry use camera technology that infringes on a digital-imaging patent owned by Kodak. January 2010 was a popular time for litigation: Motorola filed a complaint with the ITC against RIM, alleging the BlackBerry manufacturer infringed five patents on "early stage innovations" such as Wi-Fi access and user interfaces.

Kodak, Palm and RIM all declined to speak to Wired about their ongoing lawsuits. An insight into the thinking of the communications giants comes from Mark Durrant, director of communications for Nokia. "In addition to a significant increase in the complexity of products during the last two decades, integrating a wider range of technologies, the business environment has also become more aggressive," he says. "Companies needed to turn to litigation to protect their own rights for the intellectual property they own against free-riding by some, as well as defending themselves against unrealistic demands from companies with patents of questionable quality."

Comments

The new film http://patentabsurdity.com/ includes Jim Bessen.

Brian Keenan

May 13th 2010

All this litigation mania is infectious. I just discovered a bug in Blackberry's Facebook application which gives away all your contacts to anyone using the FB app on your phone http://alexanderchalkidis.com/?p=220 ) and my first thought wasn't "I should report this bug" but "maybe I should sue someone!"

Alexander Chalkidis

May 14th 2010

Review of Patent Absurdity:

http://militantlibertarian.org/2010/05/13/patent-absurdity/

.

John and Dagny Galt

May 14th 2010

Hmmmm, I was very pleased when I watched Terminator 2 for the first time as a kid. Nowadays, I'm really bugged by the term "Smart" phone. It wouldn't be the first time in history that a piece of what was once fiction became a reality.